Australian big business has spent the past couple of years trying to work out how to best bring start-ups under its wing in the hope that they can help shake up corporate ideation and culture.
Those that have taken this path as part of a journey to corporate innovation culture have typically found it rewarding, but also challenging.
A new report by Optus Business suggests that it’s a common theme among businesses seeking to create ties with start-ups.
“Few organisations can master innovation on their own,” Optus Business managing director John Paitaridis said.
“When businesses, of all sizes and maturity, build a network of partnerships, they extend their own skills and capabilities and benefit from the knowledge of others.
“We found that digital start-ups and established organisations can – and want – to learn from one another.
“They want to partner; they’re just not sure how to go about it.”
Optus’ report suggests that start-ups “need” corporate support to increase their chances of success. Therefore, in order to tap into a start-up’s thinking, any tie-up should place both partners on an equal footing.
“Currently in Australia, only one in 20 start-ups succeed,” Paitaridis said.
“Start-ups need support from industry – mentoring, advisory and access to markets – and established organisations that provide this support will benefit from access to innovative methodologies, agile ways of working and exposure to a digital-first mindset.
“Established organisations have the systems, processes and scale that start-ups need as they grow; while the culture, agility and energy of start-ups is what established organisations are looking for to drive innovation.”
Paitaridis urged corporates to partner with start-ups in a fashion where their respective learnings “are freely shared”.
Just how willing start-ups might be to strike these kinds of knowledge-sharing deals remains to be seen.
Presently, one of the more common models is to set up a corporate-backed venture capital fund, enabling the corporate to buy a seat closer to the development of new technologies and business models that start-ups are working on.
Another existing model is to run corporate-backed incubation programs that provide intensive access to a start-up for a set period, and – again – usually with the corporate funding the start-up to initiate the exchange of ideas.
Optus itself has a regional incubator project through its Singaporean parent, for which it is presently running a fresh round of applications.
“While platforms for partnership and collaboration exist (e.g.: incubators, accelerators and early stage investment programs), there are exciting possibilities for increasing the scope of exchanges between all business types,” Macquarie University Graduate School of Management’s Dr Lara Moroko said in the Optus report.
“All businesses can benefit from seeking out like-minded organisations who are trying to solve the same problem, delight the same customer or meet the same need.
“At times, this may require engaging with potential competitors to share the common problems.”